Vattenfall said on Monday, Feb 23, that it would initially buy 49 percent of Nuon's shares and buy the remaining 51 percent in the next six years.

The deal requires the approval of at least 80 percent of Nuon shareholders.

"Nuon's widely respected knowledge in renewable and clean energy technologies is a very valuable addition to our own," Vattenfall Chief Executive Lars G. Josefsson said in a press statement. "It will accelerate the realization of Vattenfall's strategy to make electricity clean."

The deal would make Vattenfall the largest European producer of offshore wind energy. Vattenfall said the merger would allow its operations to become "climate neutral" by 2050.

Nuon takeover could bolster Vattenfall

The takeover of Nuon is expected to boost Vattenfall's profile and customer base.

The Swedish-owned energy provider, which counts among Germany's biggest energy companies alongside E.ON, REW and EnBW, lost customers in Germany after recent security incidents at its nuclear plants in Brunsbüttel and Krümmel.

Vattenfall makes 80 percent of its sales in Sweden, Germany and Poland and currently produces 46 percent of its electricity from fossil fuels, 26 percent from nuclear power, 24 percent from hydroelectric power and one percent from wind.

In 2008, Vattenfall, which has 32,800 employees, posted a net profit of 1.5 billion euros.

Nuon is one of the largest energy producers and distributors in the Netherlands. It had a sales volume of 6.1 billion euros in 2008 and has more than three million customers.

Nuon employs some 10,000 people in the Netherlands, Belgium and Germany.

Author: Sonia Phalnikar (afp/dpa)

Editor: Kyle James